Quote:
Originally Posted by WestCobb
That's a good video, Chrome. There are many more like that. I can't believe that some think that Chinese sweatshops don't exist or that companies choose to manufacture in China because of Chinese "efficiencies".
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No one thinks that Chinese sweatshops don't exist. Hopefully, no one thinks that American sweatshops don't exist. Because they do. And neither the government in China, nor the the government of the United States sanction the existence of sweatshops in their respective countries.
Companies choose to manufacture in China, or in Guam, or in South Korea, or in Haiti, because, with or without sweatshops, labor is cheaper, and because when they manufacture in China, or in Guam, or in South Korea, or in Haiti, they are helping to create a market for the goods they manufacture. When Whirlpool makes refrigerators in South Korea, the money they pay to their workers can be used to buy refrigerators made by Whirlpool.
It's not complicated. Your protectionist policies don't work because any and all manufacturing companies require growth. They require EXPANDING markets. Protectionism doesn't protect manufacturing, it stifles manufacturing. Ford isn't building cheap cars in China for American consumers. They are building cheap cars in China for GLOBAL consumers. Because that's how capitalism works. Business doesn't just go to where labor is cheaper. Business goes to where demand is. And business goes to where they can create more demand. And creating demand means paying workers so that they can become consumers of your goods.
If you TRAP Ford into producing cars just for American consumers (because that's what protectionism is---a TRAP), eventually everyone has a car, and the market for those cars dwindles.
Demand dwindles in a contained market. Ford, in order to be profitable, must find new markets for its cars. And if the United States has protectionist policies agains foreign car-makers, then other countries will implement protectionist policies agains Ford cars. So that Ford cannot find new markets for its cars. So it raises prices to maintain profits, and the new prices cause demand to dwindle even more. So it builds cheaper, lower quality products to keep prices down. Which makes it even harder for it to compete internationally, and makes it harder for other American products to compete internationally because American products become known for being cheap and low quality.
You cannot stop the economy from being a global economy. It's always been a global economy. It was a global economy when Marco Polo made his way to China. It was a global economy when Columbus went in search of a faster way to the Far East. It has always been a global economy--hence the phrase "Trade Winds". Technology has made that global economy more efficient. It's faster about moving goods than ever before. It's faster about producing those goods. It's faster about transferring money than ever before. It's not a global economy that is to be feared. We've always had a global economy, and that's a good thing, because business is a form of communication. It connects all human beings to one another. The problem with the global economy is that right now, today, the speed of business makes the disparities in business practices glaringly apparent. Americans are used to their business partners adjusting their business practices to match ours, and as the world is changing, our business partners aren't willing to be as adaptable as they once were. This is where business and politics meet. And it's a challenge. And an opportunity. Part of the challenge is to keep our fears at bay, to not be reactionary. If we're the big player, then we need to act like it. Taking the ball and going home because the other players are getting too competitive isn't playing from a position of strength. And if we want to continue to be the big player, then we've got to play from a position of strength.
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